diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6ad0457..c9cab4d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,9 @@
 # Changelog
 
+## Unreleased
+
+- Show local variables of a failed test (gh-430).
+
 ## 1.2.1
 
 - Fixed a bug when `Server:grep_log()` didn't consider the `reset` option.
diff --git a/luatest/output/tap.lua b/luatest/output/tap.lua
index 454db40..f210376 100644
--- a/luatest/output/tap.lua
+++ b/luatest/output/tap.lua
@@ -29,6 +29,10 @@ function Output.mt:update_status(node)
     end
     if (node:is('fail') or node:is('error')) and self.verbosity >= self.class.VERBOSITY.VERBOSE then
         print(prefix .. node.trace:gsub('\n', '\n' .. prefix))
+        if node.locals ~= nil then
+            print(prefix .. 'locals:')
+            print(prefix .. node.locals:gsub('\n', '\n' .. prefix))
+        end
         if utils.table_len(node.servers) > 0 then
             print(prefix .. 'artifacts:')
             for _, server in pairs(node.servers) do
diff --git a/luatest/output/text.lua b/luatest/output/text.lua
index 2783de2..29b7c77 100644
--- a/luatest/output/text.lua
+++ b/luatest/output/text.lua
@@ -61,6 +61,14 @@ function Output.mt:display_one_failed_test(index, fail) -- luacheck: no unused
     print(index..") " .. fail.name .. self.class.ERROR_COLOR_CODE)
     print(fail.message .. self.class.RESET_TERM)
     print(fail.trace)
+
+    if fail.locals ~= nil then
+        print(self.class.WARN_COLOR_CODE)
+        print('locals:')
+        print(fail.locals)
+        print(self.class.RESET_TERM)
+    end
+
     if utils.table_len(fail.servers) > 0 then
         print('artifacts:')
         for _, server in pairs(fail.servers) do
diff --git a/luatest/runner.lua b/luatest/runner.lua
index 82c50ff..8964be1 100644
--- a/luatest/runner.lua
+++ b/luatest/runner.lua
@@ -376,7 +376,7 @@ function Runner.mt:update_status(node, err)
         return
     elseif err.status == 'fail' or err.status == 'error' or err.status == 'skip'
         or err.status == 'xfail' or err.status == 'xsuccess' then
-        node:update_status(err.status, err.message, err.trace)
+        node:update_status(err.status, err.message, err.trace, err.locals)
         if utils.table_len(node.servers) > 0 then
             for _, server in pairs(node.servers) do
                 server:save_artifacts()
@@ -434,10 +434,11 @@ function Runner.mt:protected_call(instance, method, pretty_name)
                     trace:sub(string.len('stack traceback:\n') + 1)
             e = e.error
         end
+        local locals = utils.locals()
         if utils.is_luatest_error(e) then
-            return {status = e.status, message = e.message, trace = trace}
+            return {status = e.status, message = e.message, trace = trace, locals = locals}
         else
-            return {status = 'error', message = e, trace = trace}
+            return {status = 'error', message = e, trace = trace, locals = locals}
         end
     end)
 
diff --git a/luatest/test_instance.lua b/luatest/test_instance.lua
index a4db250..788af20 100644
--- a/luatest/test_instance.lua
+++ b/luatest/test_instance.lua
@@ -19,10 +19,11 @@ function TestInstance.mt:initialize()
     self.servers = {}
 end
 
-function TestInstance.mt:update_status(status, message, trace)
+function TestInstance.mt:update_status(status, message, trace, locals)
     self.status = status
     self.message = message
     self.trace = trace
+    self.locals = locals
 end
 
 function TestInstance.mt:is(status)
diff --git a/luatest/utils.lua b/luatest/utils.lua
index 014179e..bb4cdd6 100644
--- a/luatest/utils.lua
+++ b/luatest/utils.lua
@@ -1,7 +1,10 @@
 local digest = require('digest')
 local fio = require('fio')
 local fun = require('fun')
-local yaml = require('yaml')
+local yaml = require('yaml').new()
+
+-- yaml.encode() fails on a function value otherwise.
+yaml.cfg({encode_use_tostring = true})
 
 local utils = {}
 
@@ -168,6 +171,68 @@ function utils.upvalues(fn)
     return ret
 end
 
+-- Get local variables from a first call frame outside luatest.
+--
+-- Returns nil if nothing found due to any reason.
+function utils.locals()
+    -- Determine a first frame with the user code (outside of
+    -- luatest).
+    local level = 3
+    while true do
+        local info = debug.getinfo(level, 'S')
+
+        -- If nothing found, exit earlier.
+        if info == nil then
+            return nil
+        end
+
+        -- Stop on first non-luatest frame.
+        if type(info.source) == 'string' and
+           info.what ~= 'C' and
+           not is_luatest_internal_line(info.source) then
+            break
+        end
+
+        level = level + 1
+    end
+
+    -- Don't try to show more then 100 variables.
+    local LIMIT = 100
+
+    local res = setmetatable({}, {__serialize = 'mapping'})
+    for i = 1, LIMIT do
+        local name, value = debug.getlocal(level, i)
+
+        -- Stop if there are no more local variables.
+        if name == nil then
+            break
+        end
+
+        -- > Variable names starting with '(' (open parentheses)
+        -- > represent internal variables (loop control variables,
+        -- > temporaries, and C function locals).
+        --
+        -- https://www.lua.org/manual/5.1/manual.html#pdf-debug.getlocal
+        if not name:startswith('(') then
+            res[name] = value
+        end
+    end
+
+    -- If no local variables found, return just nil to don't
+    -- show a garbage output like the following.
+    --
+    -- | locals:
+    -- | --- {}
+    -- | ...
+    if next(res) == nil then
+        return nil
+    end
+
+    -- Encode right here to hold the state of the locals and
+    -- ignore all the future changes.
+    return yaml.encode(res):rstrip()
+end
+
 function utils.get_fn_location(fn)
     local fn_details = debug.getinfo(fn)
     local fn_source = fn_details.source:split('/')